Programmatic marketing is “the process of buying and selling media in an automated fashion”. In other words, artificial intelligence is used to decide, in real time, what ad to show, to which target audience, where and when and over which platform, that is, desktop, mobile, video, social media and even TV.
According to eMarketer, “more than two-thirds of US digital display ad spending is programmatic”, reaching $22.1 billion in 2016. Many experts believe that programmatic marketing is the future of marketing and advertising, as it is fast moving to television, radio and other media outlets.
Digital Campaigns at the Speed of Light
Programmatic marketing works at (almost) the speed of light. When a visitor clicks the webpage of its favorite online shoe store, for example, several things happen instantaneously. The page’s publisher auctions an ad impression (real-time bidding), and the ad marketplace holds an auction among advertisers who compete to place their impression. The advertiser that bids the highest price wins the opportunity to display its ad. The ad is then delivered to the webpage visitor. If and when the visitor clicks the ad, it converts, hopefully making a purchase.
Today’s ad-serving platforms optimize content recommendations from learned user behavior (that’s where AI comes into play), matching ads to both page content and visitors in real time, sometimes even recommending related native ads.
Here are some examples of how programmatic marketing works in real life:
- Cookies and IP targeting – cookies are the tiniest piece of data that a web browser saves to detect information about a page visitor. IP targeting or IP tracking is simply using IP addresses to target audiences. Both are widely used in programmatic marketing to make sure that businesses target the right audience with their ads.
- Geolocation – location-based targeting is another tool used by programmatic marketing to focus on the right audience in the right place. By monitoring mobile location, for example, companies like Google build mobile ads with dynamic content that changes based on the user’s location, time of day, user preferences and other data.
- Big data marketing – according to Forbes, “In marketing, big data is providing insights into which content is the most effective at each stage of the sales cycle…” (Ten Ways Bid Data Is Revolutionizing Marketing and Sales). Big data has changed the marketing environment as it provides vital information like who the customers are, where they live, how they want to be contacted, and what makes them tick. This enables businesses to decide what channels work best for what target populations.
Real-time bidding is the purchase of ads through real-time auctions. This means that when a visitor to the online shoe store clicks a page and accesses a publisher, there is an auction of ads behind the scenes. Advertisers go through a Demand-Side Platform (DSP), which provides them with information of the visitor to the page. The platform places bids against other bidders, the highest wins the auction, and its ad is placed on the publisher’s webpage or application.
Who Needs It?
Basically, any business advertising online should go programmatic (if it hasn’t done so yet). This form of marketing is really growing, and by relying on big data and analytics tools businesses can analyze and improve their digital marketing substantially. Since targeting is the name of the game, programmatic gives the best chances today to reach the right audience at the right time.
However, not many small or medium-size businesses can do programmatic marketing on their own. Programmatic requires expert knowledge, platforms and technologies that are sometimes beyond the reach of many businesses. Choosing the right partner to dive into the world of programmatic is important because this marketing strategy is dynamic and changes almost at the speed of light. Only companies that know the ins and outs of this methodology, know the target market and are familiar with the latest tools can provide tangible results.